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Online, Catalog and Mail Order Sources

Mail-order and catalog PCs have been around for a long time--around as long as the PC itself has existed. Some of these companies traditionally sold from ads in computer magazines; others sold from catalogs; some did both. They have always been more popular with computer enthusiasts and those in the industry than they were with the general public.

Over the last few years, this market has been revolutionized by companies selling online, using the World Wide Web. Realizing the power of the Internet, companies that used to primarily sell by mail order have rapidly moved to establish an online presence, and for obvious reasons: the Web offers significant advantages to both seller and buyer compared to catalog mail order. This has resulted in the lines between online, catalog and mail order sources becoming so blurry now as to make the difference between them hard to determine: online sellers usually also take orders by phone or fax, and they all advertise in a variety of ways, both online and off.

In the end, all these companies use the same basic business model: customers submit orders to them, and they procure or build the hardware and ship it to the customer. The distinction of how the orders are submitted isn't that important anyway, which is why I discuss all of them here in this section. It is in fact more appropriate to distinguish them on the basis of their size and what they sell, rather than how they get their orders.

Here are some of the more important advantages that apply to all of the different sources in this category (also see the individual online source pages for more advantages specific to each source type):

• Very Good Prices: Prices for hardware and software are generally very good, because most of these companies have a high volume of sales, and relatively low overhead (since they have no "brick and mortar" stores).
• Very Good Selection: The lack of physical buildings (and the need to manage physical inventory) also allows most online sources to offer vastly better selection than retail stores.
• No Sales Tax: Unless you happen to live in the same state as the company you are buying from, there is often no sales tax explicitly charged (but see the warning below). Since the tradeoff is the disadvantage of shipping costs, the lack of sales tax is of primary use when buying smaller, more expensive items. Of course, if your state has no sales tax, this doesn't matter much to you. Also, for those outside the United States the situation varies greatly, with duties on imported items sometimes equaling local sales taxes.

Warning: Be advised that some states require you to pay sales tax even on items purchased from other states--you are supposed to declare the items and pay the sales tax voluntarily. Check and follow all local laws that are applicable to you.

• "Shop At Home" Convenience: You can shop for any hardware or software you can imagine without leaving home. This is an advantage for many people, ranging from those who are mobility-impaired to those who live in small towns without any big computer or electronics stores.

There are actually many more advantages to these sources, but they vary by the type of source, so they are listed in the individual sub-category pages. Here are some disadvantages that apply to all online or mail-order sources (again, see the individual pages for disadvantages that are specific to a sub-type):

• Shipping Costs: The need to tack on shipping costs eats up some portion of the savings on what you are buying, depending on the company and on what you are buying. Large, heavy items sometimes end up being more expensive than they would be at a retail store due to shipping and handling. Some companies under-price items to get sales and then try to make it back with exorbitant shipping and handling charges.
• Order Tracking Hassles: You run the risk of hassles associated with having items shipped: order confirmations, items out of stock, tracking numbers, lost parcels, wondering when the item will be delivered, etc.
• No Personalized Shopping: With few exceptions, you don't get to shop in person and "touch and feel" the merchandise. The Web makes it easier to get pictures of product you are buying, and information about it, but it's just not the same. This is especially problematic for components where assessment is largely personal: monitor quality, printer output, and input devices. It's also usually more difficult to contact the company to ask questions.
• Delays and No "Instant Gratification": When you buy something online or by mail order, you have to wait for it to be delivered: no instant gratification, and if you are in a hurry you can't get what you need within an hour as you can at a retail store. (You can sometimes get items shipped overnight, but usually at a high additional cost.)
• More Difficult Returns: If a product you buy arrives dead, you'll incur more hassles and costs in returning it, and more delays waiting for replacement merchandise.
• Potential Service Hassles: Service is more difficult when dealing with a distant company, compared to dealing with a local one.

For many people, ordering online or by mail order compared to buying retail boils down to this: retail costs more but is faster and more convenient. Certainly, there is a kernel of truth to this, but it's a bit of an oversimplification. You'll also notice, as you read the individual sections on online and mail order sources, that the bottom line depends on what source type you are looking at.

Note: Many retail stores are also now introducing web sites for online ordering of what they sell in their stores. In some cases these are full-featured, but just as often, they are more "we need to have a web site" web sites than anything else. :^) I do not consider these companies to be in the same category as the online sources discussed here; they are described in the section on retail sources.

Next: Direct Channel PC Manufacturers

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